Buenos Aires, Argentina — President Javier Milei shook Argentina’s political scene in March after announcing his government would not seek congressional approval for an agreement currently being negotiated with the International Monetary Fund (IMF).
Despite laws requiring parliamentary support for any IMF deal —and although the agreement is neither complete nor its terms known— the president this week published a decree approving a future 10-year program. The initiative drew massive rejection from opposition parties, but it remains unclear whether Milei’s decree will hold up in Congress and in the courts.
Milei and all his ministers signed Decree 179/2025 on March 10. After lengthy justifications, the decree authorizes the executive branch to negotiate an Extended Fund Facility program with the International Monetary Fund for the next 10 years. The stated objective of the agreement, whose details remain unclear, is to cancel Intransferable Letters, which represent Argentina’s Treasury debt with the Central Bank.
Private consultants estimate the new debt will total between $10 billion and $20 billion. It is expected to be used to repay some of the debt with the IMF itself, while critics argue that those dollars could be used to sustain an artificially low exchange rate, colloquially known as a “cheap dollar.”
The decree surprised the opposition, as Milei announced on March 1 that he would send a bill to Congress to discuss the IMF agreement. Parliamentary approval is required under Law 27,612, passed in 2021 during President Alberto Fernández’s administration, while then-Economy Minister Martín Guzmán was negotiating with the lending agency. The law was approved after former President Mauricio Macri signed a stand-by agreement with the IMF in 2018. The world-record $57 billion debt, of which $44 billion was actually disbursed, required restructuring shortly after Macri lost reelection.
Julie Kozack, spokesperson for the IMF, said on March 6 that “securing congressional support is a decision of the authorities as legislated in Argentine domestic law.” However, she added that “broad political and social support can enhance program implementation.”
Still commanding a legislative minority at least until October’s elections, Milei would face a challenge in passing a new law in a Congress dominated by the opposition Justicialist Party. The decree neither meets the requirements of Law 27,612 nor voids or modifies it, but it has been in effect since its signing. The president hopes it will remain valid long enough for the final deal with the IMF to be signed, which is expected before April. However, even before that, it could be overturned by Congress —which would require a majority in both houses— or repealed by the courts.
Milei’s aggressive and bold negotiation tactics have proven effective in his first year in office, allowing him to pass most of his initiatives despite being in the legislative minority. However, the current Congress appears less cooperative after the cryptocurrency $Libra scandal, which hurt the government’s popularity, and Milei’s push to nominate two Supreme Court judges while bypassing legislative approval.
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Led by Cristina Fernández de Kirchner, the Justicialist Party opposes the agreement with the IMF on principle, questioning the new debt. “Stop lying to the people, nobody believes you, you’re actually desperate because you need dollars,” the former president argued in a lengthy post on X.
Buenos Aires Provincial Governor Axel Kicillof demanded that part of the IMF agreement funds be allocated to assist with recent floods in Bahía Blanca —which left 16 dead and dozens still missing— rather than being “gambled away.”
House representatives from Unión por la Patria, the Justicialist bloc in Congress, filed criminal charges against Milei for abuse of authority, violating the Constitution, and other offenses. Other opposition parties criticized the president’s decree while stopping short of rejecting a new agreement with the International Monetary Fund, insisting that the deal be debated in Congress.
Since a decree requires rejection from both chambers to be repealed, the government plans to maneuver in the House of Representatives, where it has previously negotiated successfully with opposition legislators and governors. The goal is to postpone the debate indefinitely or, if possible, prevent it from reaching the floor.
A race against time
The Argentine government expects to reach a new agreement with the International Monetary Fund before April. The Southern Hemisphere summer months have depleted the central bank’s reserves, after nearly 2 million middle- and upper-class Argentines took advantage of a strong peso to travel abroad, particularly to Chile, Brazil, Europe, and the United States.
Milei’s economic model has relied heavily on using incoming dollars to stabilize exchange rates, raise salaries, and help combat inflation. However, after recent debt payments —and with the agricultural harvest season yet to arrive to boost exports— those dollars appear to be in short supply.
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Critics, including Fernández de Kirchner, argue that Milei plans to use the International Monetary Fund loan to sustain the exchange rate until the October elections. After that, they claim, a devaluation is inevitable. Both the president and his economy minister, Luis Caputo, have repeatedly stated that the agreement will not result in a depreciation of the peso and will not imply “new debt,” since the funds will be used to pay off the central bank’s loans.
High-profile economists, including Domingo Cavallo, have recommended that the government use the International Monetary Fund deal to pursue a liberalization of exchange markets that would prevent future devaluations. However, such proposals have publicly angered Milei, who once considered Cavallo “the best economy minister in history.”
Time appears to be of the essence for approving the IMF deal. Economic journalist Carlos Burgueño claims there are 20 billion dollars from investors currently engaged in carry trade deals to take advantage of Argentina’s interest rate. If no agreement is reached before the end of April, he warned, that money could move to the dollar and likely trigger an exchange rate crisis.
